Darktrace Share Price Plunged 11.84% As KKR Sold 19.4m Shares

The Darktrace PLC (LON: DARK) share price plunged 11.84% after KKR Dark Aggregator L.P. completed the divestiture of approximately 19.4 million ordinary shares at a unit price of 425 pence, culminating in the seller's comprehensive exit from Darktrace. The decline in Darktrace’s share price also reflects the discount at which the seller sold their shares. 

The sale culminated the investment journey for the inaugural technology growth fund (NGT I), advised by the global investment firm Kohlberg Kravis Roberts & Co. L.P. (KKR) and its associated entities. This fund aligned itself with Darktrace in 2016, identifying the company as a burgeoning force within the cybersecurity domain. 

The transaction's closure is slated for 26 March 2024, signifying the end of a pivotal chapter in Darktrace's partnership with KKR's NGT I fund. Contrastingly, the successor fund, NGT II, also under the advisory purview of KKR, opted not to engage in this share placement, affirming its ongoing confidence in Darktrace by retaining an approximately 7.3% stake in the company. 

The decision underscores the fund's belief in Darktrace's enduring value proposition and potential for future growth within the ever-evolving cybersecurity landscape. Further stipulations from the sale include a 60-day lock-up agreement by the Seller regarding any additional shares held in Darktrace by NGT II. 

The agreement, however, is subject to customary exceptions, underscoring a strategic approach to managing the company's remaining investments. It's important to note that Darktrace plc remains uninvolved in the financial aspects of this share placement, with no proceeds from the sale entering the company's coffers. 

The transaction primarily represents a shift in the investment landscape surrounding Darktrace as key stakeholders realign their investment strategies. Jefferies International Limited and Joh managed the operational facets of the share placement. Berenberg, Gossler & Co. KG, London Branch, serving as the Joint Global Coordinators and Joint Bookrunners.

Their roles were pivotal in ensuring the smooth execution of this complex transaction, further emphasising the intricate dynamics of investment management within the technology sector. 

This transaction highlights the fluid nature of venture capital and private equity investments in the tech industry and illustrates their lifecycle, from initial engagement to eventual exit. 

The strategic decisions made by funds like NGT I and NGT II regarding their holdings in Darktrace reflect broader trends in investment strategies within the technology sector, particularly in critical areas such as cybersecurity.

Darktrace share price. 

The Darktrace share price plunged 11.84% to trade at 405.9p from Thursday’s closing price of 460.4p.